Resilience Initiative Tracker

The City engaged Baker Tilly to review current economic development incentives and develop a framework for a new economic incentives model with the goal of promoting more equitable and inclusive growth through a refined incentives application review process. While the City currently does not have an objective process for determining which development projects to fund, the new process, including the utilization of a City Investment Scorecard, will aim to guarantee that the projects that are awarded financial assistance from the City deliver community benefits that are aligned with the City’s priorities, and that the projects will result in a strong return on investment for the City.

Incentives provided through tax credits and abatements are expenditures of public funds and should be scrutinized in the same way as line items in the budget. The Baker Tilly review is intended to provide visibility into the goals of each incentive, incentive costs, actual benefits generated and the distribution of benefits, and the efficiency with which benefits are produced. Community Benefits Agreements (CBAs) will be part of this review. CBAs are incentives to development projects to promote equity and public value through minority business participation, amenities such as green space, affordable housing, etc.

The new incentive review process and scorecard tool will also provide greater transparency for developers. The City’s priorities and scoring will be clear and available to the public, which will support developers in putting together projects that align with the City’s goals.

Over time, the City has accumulated 267 unique bank accounts across all departments, which poses challenges in terms of tracking and reporting City finances and making informed and timely financial decisions. Historically, bank accounts have been set up as an accounting mechanism, which is not necessary with modern financial technology.

To simplify financial operations and save money, the City will eliminate excess bank accounts and consolidate existing ones, resulting in a reduced number of accounts that are easier to monitor and maintain.

This effort will be a phased approach by department to minimize potential disruptions to current operations and payments. Changes will have to be made in financial reporting, which will require updates to processes and how the City utilizes its financial technology.

The City’s current long-term financial plan is not strategic. It is a set of financial policies and a 5-year general fund forecast that understates the cost to maintain current services by assuming no salary and wage increases.

A more strategic financial plan would provide a realistic assessment of budget and other fiscal challenges and specific steps to address them.

The City will draft a long-term financial plan (10 years) that will serve as a roadmap for sustainable fiscal management. It will help ensure the City’s financial health and stability over the long-term and navigate economic uncertainties.

The financial plan will clearly articulate its goals and set of actions and reforms and will include measures of success to track results.

Key components of the plan will include revenue and expenditure projections under multiple economic scenarios, a long-term debt management strategy, options for increasing revenue and reducing costs, a review of financial policies, and a capital financing plan.

One of the barriers to achieving the City’s small businesses contracting goals is that some of these businesses have insufficient cash flow to start up and maintain operations on the City’s billing/payment cycle. As a result, the City receives fewer bids, and thus less competition, which in aggregate increases costs to taxpayers.

This initiative would establish a revolving short-term loan program with a partner banking institution to support vendors in bridging cashflow gaps.

The program will be managed by the third-party bank, which will be responsible for carefully screening and monitoring applicants. Vendors in the program will receive training and technical assistance to successfully scale their businesses and improve financial management.

As of late 2023, some initial planning was conducted, but put on hold while the Finance department works through process digitization. Upon completion of this digitization effort (which includes speeding up vendor payments), the short-term liquidity initiative will be revisited.

More detailed planning on the implementation of the program (including vendor requirements and necessary legislation) will be required.

The City has taken steps to define the programs it funds, but does not present budget and performance data at the program level. Further, the City follows a traditional budgeting process, which orients the budget to past spending patterns instead of future needs and priorities.

This initiative establishes a framework for allocating resources based on the outcomes and impact of programs, fostering a more strategic and results-oriented budgeting approach.

The City will define desired outcomes in collaboration with residents, develop plans for achieving the outcomes, and allocate funding to each outcome.

The Finance Department will be tasked with identifying and prioritizing programs based on performance and alignment with outcomes. Departments requesting funding for programs will have to show how each program will contribute to achieving the desired outcomes.

The Program Budgeting Pilot will encourage departments to measure the performance of each program. In the long-term, the City aims to have every program and operational function define and track performance metrics and report progress.

Today, a standard City contract or grant specifies a set of tasks and deliverables expected from the vendor; monitoring focuses on completion of tasks and adherence to budget, rather than the results generated and measurable positive impact generated by the tasks and deliverables of the contract or grant.

This initiative will implement performance-based contracts and grants that specify desired results and measures of success, giving vendors more freedom to propose creative and cost-effective solutions and manage to overall budgets without line-item oversight. Successful examples of this approach include Boston’s website redesign and Seattle’s contracting for homeless services.

The City will develop a framework for monitoring contract and grant performance against predefined standards and expectations. This framework will inform future contracting decisions, including the replacement of underperforming vendors and the selection of strategic high value procurements that have the potential to yield improved outcomes.

Contracts and grants will articulate specific and measurable outcomes, enabling the City to evaluate vendor performance and providing vendors with real-time visibility into their performance to adapt strategies accordingly.

The City will leverage an existing partnership with What Works Cities, which has a key focus area on results-driven solicitations, in order to implement this initiative.

The City is estimated to own one-third of Cleveland’s land, the majority (~18,000 parcels) of which are held by the Community Development Land Bank.

In addition to the bank-owned owned properties, there are additional City-owned properties under the control of multiple departments and authorities. These properties have little consolidated planning and a patchwork of bureaucratic processes for disposition. The Land Bank, which does have standardized procedures and delegated authority over parcels in its possession, is only disposing an average of ~300 properties per year.

In order to maximize the public value of properties through sale, lease, development, renovation, and reuse of City-owned land, the City will develop a governance framework and standardized decision flow. The governance framework will include clarified roles and responsibilities for each type of property being considered for disposition (including industrial sites eligible for funding through the newly established Site Readiness for Good Jobs Fund).

As part of this initiative, the City will also consider organizational changes to consolidate real estate functions (including the disposition function) into a centralized function (detailed in Initiative C4) to more centrally manage this process and limit the number of dependencies. The City will also standardize and consolidate data management by developing a regularly updated inventory of available parcels, which can serve as a “source of truth” for properties owned by the City.

The City will conduct an assessment of the fee and fine structure across City services aimed at identifying opportunities to enhance transparency and efficiency. This involves analyzing the costs associated with fee-based services and establishing a fee policy that balances cost recovery and equitable fee incidence.

The City will explore the introduction of segmented pricing to reduce fee and fine costs for low-income residents to a level that accommodates their ability to pay and increases collection rates for the City. The City will also engage partner organizations to provide financial counseling to residents with unpaid fees and fines and refer them to other services as needed.

As part of this review, the City will also review the technology used to collect and process fees to improve efficiency, reporting, and enforcement.

This initiative will improve revenue enforcement through better use of data, technology, contracts, and personnel, with the goal of promoting efficient and effective collection of revenues owed to the City by both residents and commercial entities.

For example, the City will use advanced data techniques to identify noncompliance, such as finding parking  
tax outliers based on mapping tax payments per space across the city or identifying restaurants past due on permit fees.

The City will explore budget structures that encourage optimal investment in revenue enforcement, allowing recovered revenue to be reinvested to the point of diminishing returns (the point at which we would be spending more on enforcement than we would be collecting in revenue recovery).

The City will also review the cost and performance of collection contracts to ensure maximum value.

The City will create a unit within the Finance Department to address future needs of the City of Cleveland. This unit will work closely with the Office of the Mayor and Government Affairs team and with relevant departments to prioritize, solicit, and oversee investments from philanthropy, private, state, and federal government to support priority projects within the city.

The unit will be responsible for developing strategies to fund major initiatives, manage grant applications and compliance, and support City projects with grant-writing and pursuit assistance. It will oversee the requirements and deployment of the end-to-end grants management system (as detailed in Initiative B3) in coordination with the Information Technology Department.

It will also expand innovative financing options such as Public-Private Partnerships, Social Impact Bonds, energy efficiency contracts, Green Bonds, outcome-based financing, carbon credits, Tax Increment Financing, tax incentives, etc.

Due to the current influx of federal funds into the city, promptly establishing the unit will better position the City  
to secure these funds.

The unit will build strong relationships with funders to attract diverse sources of funding and with the community  
to gather input on financial priorities.

Utilize City-owned spaces and assets for advertising to generate incremental revenue for the City with no new taxes or fees and little-to-no additional cost as it will be collecting money from existing structures and right-of-way.

The City can lease advertising rights to third parties for flat or contingent fees or can charge monthly or annual fees to companies to place their logos or ads on City-owned assets and assets purchased and maintained by the vendors (such as solar-powered trash cans).

A key municipal advertising venue is street furniture, which includes public trash and recycling receptacles, benches, light poles, tree pits, traffic barriers, bollards, fire hydrants, parking meters, etc.

Other advertising options include City-owned sanitation trucks and other vehicles, trash and recycling bins, parking garages, digital signs or billboards, banners, inserts in water or tax bills, naming rights, and the City’s website.

Municipal advertising will be carefully regulated to preserve the authenticity of Cleveland’s character and landscape and minimize visual clutter.

Cities such as Chicago and Boston have implemented street furniture programs (e.g., automatic toilets, bus shelters, info kiosks and telephone pillars in Boston) In addition, the City of Chicago has various municipal advertising programs where the City leases advertising rights to third parties for flat or contingent fees, such as on digital billboards.

The City is committed to prioritizing sustainable investments that not only yield long-term cost savings but also account for the long-term environmental impacts linked to City assets, operations, and the health of the community and employees.

As part of this initiative, the City will establish a Sustainable Purchasing Policy that drives decarbonization and circular economic practices. The City is committed to the reduction of greenhouse gas emissions and waste in every step of a product’s or service’s lifecycle with the goal of reducing long-term extractive costs such as environmental degradation of air, land, water and human/animal health. In alignment with industry-leading standards such as LEED and WELL Building Standards, the City aims to increase environmentally conscious and socially responsible development and building practices.

Examples of short-term actions the City will take to reduce costs include: digitizing paper-based processes to reduce paper purchasing and waste; installing publicly available filtered water-dispensers in City facilities; installing LEDs with lower color temperature to avoid employee and visitor discomfort and reduce energy use; inspecting and testing of all newly installed equipment to enable proper and efficient operations.

Examples of medium-term actions the City will take to reduce costs include: employing energy efficiency measures and standards in equipment repairs and purchases related to building renovations and construction; embedding the comprehensive Sustainable Building policy into capital project planning and funding applications; exploring ways to  
save energy and extend the lifespan of buildings and equipment; implementing building automation systems for increased building performance.

Examples of long-term actions the City will take to reduce costs include: converting to zero emission vehicles; converting to physical renewables such as local and/or onsite solar or wind power; purchasing healthy materials for building cleaning and construction projects including zero-Volatile Organic Compound (VOC) emitting and low-hazard emitting materials to protect health of workers and visitors.

Cities deliver services in a variety of ways, including directly with City employees and through Alternative Service Delivery (ASD) models, such as grants or contracts with nonprofit organizations, contracts with private vendors, and service agreements with other governments. Some cities, most notably Indianapolis and San Diego, have expanded the use of ASD to functions traditionally performed by City employees.

This initiative would create a working group to explore the feasibility and benefits of expanding ASD in Cleveland. The working group will be composed of representatives from relevant City departments and subject matter experts.

One key ASD option is managed competition where in-house service units of City Government compete with external service providers in a controlled or managed process that ensures fairness to City employees.

Another option is shared service where the City can partner with other public service providers, such as Cuyahoga County or neighboring municipalities, to minimize cost and maximize asset use.

ASD can be applicable to Cleveland’s Internal Service Funds, such as printing. It can also be applied to fleet maintenance, trash collection, and various other services.

The Administration is committed to minimizing potential impacts of ASD on employees and will support affected personnel through reassignment, reemployment, early retirement incentives, and other means.

Employ gainsharing, a labor-management partnership in which cost savings from improved productivity are shared with employees. The City will incentivize higher performance to save costs and in return, employees will receive a share of the savings as additional income based on achieving specific performance goals, such as achieving cost savings or operational efficiencies.

Other cities, including Baltimore, Memphis, and Indianapolis, have successfully used gainsharing across several functions. In Baltimore, gainsharing in the fleet division reduced outsourcing of vehicle maintenance work and resulted in $2,000 payments to every fleet employee in the first year. Memphis’ sanitation gainsharing program dramatically reduced absenteeism among other benefits.

The Division of Streets’ resurfacing services in the Department of Public Works is a candidate for gainsharing.  
The goal would be for the Division employees to complete more work in-house, rather than hiring external contractors. If successful, the employees would receive a portion of the cost differential between in-house and contracted projects.

The City would pair gainsharing with training on business process improvement techniques (as detailed in Initiative A5), such as Lean, to assist departments in achieving cost-saving efficiencies.

As cyber threats evolve and mature, the City is determined to maximize the fortifications of digital infrastructure. Through this initiative, the City will enhance security capabilities against emerging cyber threats, digital, and online attacks.

The City will create a resilient, secure, and technologically advanced environment through programs employing zero trust fundamentals, enablement of a 24x7 Security Operations Center (SOC), and installation of a Security Information and Event Management (SIEM) platform. Collectively, these enhancements will enable the advanced monitoring, identification, and mitigation of cyber risks, events, and intrusions.

As an additional layer of protection, the City will explore the purchase of cybersecurity insurance to provide financial safeguards in the event of a cyber incident and improve the City’s ability to recover and respond effectively.

The City will establish an internal revolving loan fund to provide seed money for projects that promise to reduce costs or generate new revenue over 3-5 years.

Savings or revenue achieved through funded projects will first repay the loan and then be shared with the implementing departments and the General Fund.

Departments will submit proposals for projects with details around description, expected costs, goals, and implementation plan. Projects will be evaluated based on criteria such as quality of proposals, expected outcomes, cost savings and/or new revenue potential, equity impacts and risks.

Examples from Baltimore’s Innovation Fund include electronic plans review, generating revenue from tree waste, making surface parking lots safer and more attractive, and installing DriveCams in fire trucks to reduce accidents. Process improvement projects that are part of the Innovation Accelerator Program (as detailed in Initiative A5) will qualify to receive funding from the Innovation Fund.

If successful, the City could seek private funding for innovative projects.